Thousands protest against crackdown in south Yemen

Opposition supporters chant prayers as they attend an anti-government sit-in in Sanaa March 11, 2010 to show support to the Southern Movement which stages protests in the south of Yemen to call for the south to secede from the north. Yemen, under international pressure to quiet domestic unrest and focus its sights on al Qaeda, has offered to hold talks with southern separatists and hear their grievances, state media said on Tuesday.

SANAA (Reuters) - Yemeni forces launched an attack Thursday to recapture a government building occupied by separatists in the south of the country, setting off a gunfight that killed two people, a local official and witnesses said.

Two protesters were shot dead as security forces tried to quash a separatist demonstration in another southern province. Elsewhere in Yemen, thousands gathered for demonstrations to demand an easing of the crackdown on the south.

Under international pressure to quell domestic unrest and focus its sights on al Qaeda, Yemen earlier this week offered to hold talks with southern separatists and hear their grievances.

The offer by President Ali Abdullah Saleh followed an escalation of violence on both sides in southern Yemen which left a trail of dead and wounded in recent weeks while insurgent violence elsewhere in the country has faded.

Crowds of demonstrators in several cities called for the military to withdraw from southern cities and for the government to halt a sweeping campaign of arrests.

In the southern town of Tor al-Baha, Yemeni forces launched an attack to recapture a government building occupied by armed tribesmen, sparking a gun battle in which two people, including a passer-by, were killed, a local official said.

Tribal gunmen closed off all roads leading to the center of the town and surrounded security forces, witnesses told Reuters.

"Large military forces launched a campaign this morning to retake the municipality building (in a southern province). But gunmen from the southern movement confronted them and the two sides exchanged fire," the local official said.

He said a large group of armed separatists had been occupying the municipal headquarters of Tor al-Baha for months.

TWO PROTESTERS KILLED

While offering dialogue, Saleh also said the separatist flag would "burn in the days and weeks ahead." The separatists, who lack a unified leadership, have given no public response to the president's offer.

North and South Yemen united in 1990, but many in the south -- home to most of Yemen's oil industry -- complain northerners have seized resources and discriminate against them.

Diplomats say previous talks offers by Sanaa have not been followed by action to tackle southern complaints that the government neglects the south and treats southerners unfairly, including in property disputes, jobs and pension rights.

In the southern province of Dalea, two protesters were shot dead and four people were wounded, including two soldiers, and in the city of Taiz, security forces used teargas and water cannon to disperse demonstrators, an opposition source and witnesses told Reuters.

Mobile phone networks in some areas in the south, including parts of Dalea and in another southern province Lahej, had been shut down by the authorities, residents told Reuters. Yemeni media reported that the ministry of information had ordered networks in the south to be disconnected as a security measure.

Peaceful protests also took place in the capital Sanaa, and in the western province of Hudaydah.

Exiled southern leader Ali Salem al-Beidh said in a statement that security forces had opened fire on peaceful protesters in several areas and that clashes were continuing.

"We warn Sanaa against continuing its aggression toward our people and we call on Arab countries and the United Nations ... to condemn these ugly crimes and to pressure this murderous and criminal regime to stop killing civilians and the innocent," said Beidh, who lives in Germany.

Pressure increased on Yemen to concentrate its efforts on containing al Qaeda after the Yemeni-based regional arm of the militant group claimed responsibility for an unsuccessful attempt to bomb a U.S.-bound passenger plane in December.

Western allies and neighboring Saudi Arabia fear al Qaeda is exploiting instability in Yemen, where 42 percent of the people live in poverty, to use the country as a base from which to prepare attacks in the region and beyond.

Besides its conflict with the separatists, Yemen is trying to bring an end to a Shi'ite insurgency in the north which drew in oil exporter Saudi Arabia in November.

Some southerners say Saleh's ties to Saudi Arabia, Yemen's biggest donor, have led him to tolerate inroads by the kingdom's puritanical Wahhabi sect of Sunni Islam.

(Reporting by Mohammed Ghobari and Mohamed Mokhashaf; Writing by Cynthia Johnston and Raissa Kasolowsky; Editing by Andrew Dobbie )